The validity of arbitration clauses in nursing home residency agreements will be decided by the U.S. Supreme Court, as justices have agreed to hear a case against two Kentucky facilities.
According to the Courthouse News Service, Extendicare and Kindred Nursing Centers, the parent companies of the nursing homes being sued, had patients’ legal representatives sign agreements that specified claims against the nursing home would be decided by arbitration, not in the courts. The companies tried to exercise this clause when sued by several patients' families for personal injuries and wrongful death, but several courts, including the Kentucky Supreme Court, ruled against them.
“The authority to enter into a pre-dispute arbitration agreement was not among the powers granted to respective attorney-in-fact and, therefore the arbitration agreements were not formed with the assent of the party to be bound thereby,” the Court’s ruling said. "Lacking the essential element of assent, we conclude that the arbitration agreements in those cases were never validly formed.”
It could be one of several court battles brewing over mandatory arbitration agreements in nursing homes. After CMS finalized a new long-term care rule banning those clauses in future agreements, nursing homes’ top trade group filed a lawsuit seeking to block that provision from going into effect on Nov. 28.
For more on the Kentucky case and the legal argument from nursing homes, click on the link below: